Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
2015 NSW Dairy Farm Monitor Project Camden, 2nd Mar 2016 Kerry Kempton – Technical Specialist Dairy Peter Havrlant – Development Officer Dairy NSW DPI Dairy Business Outlook Discussion Groups – 2016 DISCLAIMER / WARNING This report should be used as indication of the dairy farms in NSW for 2015 F/Y It is not an industry benchmarking tool Averages/statistics/trends are not statistically significant BEWARE AVERAGES!!!! Data should not be used by financial institutions for lending assessment purposes Milk pricing information should not be used for contracting purposes NSW Dairy Farm Monitor Project 4th year running in NSW 37 farms analysed across NSW Now part of the national DFM Project & database Based on Victorian program, funded by Dairy Australia Why do it? As a service to the NSW dairy industry To provide accurate reliable information about NSW dairy farm performance To monitor changes and trends over time To provide the participating farmers with an indepth analysis of their business To understand the issues and factors affecting farms and families Dairy Farm Monitor Project Participant locations Dairy Farm Monitor Project divided by assets managed divided by Return on asset managed (%) equity Return on equity (%) DFMP method Cash vs Profit Source methodology: Dairy Farm Monitor Project 7 Cash vs Profit continued 8 Dairy Farm Monitor Project 2014/15 season Milk price $7.46/kg MS, (54 c/l) up 3% from 2013/14 Concentrate price $370/t as fed ($413/t DM) Above average rainfall Results for 2014/15 for NSW See Infographics Results in more detail……….. Dairy Farm Monitor Project Physical Results – State & regions avge Physical results State North South Average Milk price received ($/kg MS) $7.46 7.62 7.28 Herd size (No. cows in milk for at least 3 months) 338 259 430 Water used – rain plus irrigation (mm) 1130 1430 1076 Total usable area (hectares) 287 215 372 Milking area (hectares) 128 95 165 Milk sold (kg MS/cow) 506 477 540 Pasture grazed (t DM/ milking ha) 6.5 6.4 6.7 Pasture conserved (t DM/ milking ha) 1.8 1.8 1.8 $370 390 350 2.6 2.4 2.8 Concentrate Price ($/t as fed) Purchased feed /cow (t DM/cow) Financial Results - State (average) 2014/15 2013/14 Assets $6.4M $6.3M Debt $1.5M $1.5M Equity 76% 76% EBIT $264k $170k Net Farm Income $160k $56k RoA 3.5% 2.6% RoE 2.8% 1.3% Financial Results - regions (average) North South Assets $4.8M $8.4M Debt $0.9M $1.9M Equity 78% 73% EBIT $120k $435k Net Farm Income $26k $319k RoA 1.9% 5.3% RoE 0.4% 5.7% Dairy Farm Monitor Project Return on assets managed % - regions 14 12 8 6 4 2 Return on Assets (%) North South > 12.5 % 10 - 12.5% 7.5 - 10% 5 - 7.5% 2.5 - 5% 0 - 2.5% 0 < 0% Number of farms 10 Return on assets managed % Dairy Farm Monitor Project Earnings before interest and tax per Kg MS $2.50 EBIT ($/kg MS) $2.00 $1.50 $1.00 $1.91 $1.32 $0.50 $0.82 10 c/l 14 c/l 6 c/l $0.00 Statewide North NSW South NSW Farm income and cost category State-wide kg MS North c/l kg MS South c/l kg MS c/l INCOME Milk income (net) $7.46 54.1 $7.62 54.7 $7.28 53.4 Total income $8.44 61.3 $8.61 61.9 $8.25 60.5 $1.26 9.1 $1.43 10.2 $1.06 7.8 $2.29 16.4 $2.35 16.7 $2.22 16.1 $4.16 30.0 $4.48 32.0 $3.79 27.7 Employed labour $0.85 6.1 $0.94 6.7 $0.75 5.4 Imputed labour $0.89 6.4 $1.05 7.5 $0.70 5.1 Total overhead costs $2.96 21.4 $3.31 23.7 $2.55 18.6 COST OF PRODUCTION $7.12 51.5 $7.55 57.6 $6.11 48.1 EBIT $1.32 10.0 $0.82 6.0 $1.91 14.0 VARIABLE COSTS Home grown feed cost Purchased feed and agistment Total variable costs OVERHEAD COSTS Profit results There is a wide variation between farms in both groups. The top 25% farms (based on Return on Assets) are shown in the striped bars. Dairy Farm Monitor Project Earnings before interest and tax - North $3.50 25 $3.00 20 $2.50 10 $1.00 5 $0.50 $0.00 0 -$0.50 -5 14/15 $/kg MS 14/15 Average $/kg MS Top 25% * $/kg MS 14/15 cents/litre 13/14 Ave NN0026 NN0025 NN0024 NN0023 NN0022 NN0021 NN0020 NN0019 NN0017 NN0016 NN0011 NN0010 NN0009 NN0008 NN0007 NN0006 NN0005 NN0004 -$1.50 NN0003 -$1.00 NN0002 EBIT ($/kg MS) $1.50 -10 EBIT (cents/litre) 15 $2.00 Dairy Farm Monitor Project Earnings before interest and tax - South $4.50 35 $4.00 30 25 $2.50 20 $2.00 15 $1.50 10 $1.00 5 14/15 $/kg MS 14/15 Average $/kg MS Top 25% * $/kg MS 14/15 cents/litre 13/14 Ave SN0022 SN0021 SN0020 SN0019 SN0018 SN0017 SN0016 SN0014 SN0013 SN0012 SN0010 SN0009 SN0007 SN0006 SN0005 $0.00 SN0004 $0.50 SN0002 EBIT ($/kg MS) $3.00 0 EBIT (cents/litre) $3.50 Regional variation There is also a clear difference in profitability between the North and South regions. These differences continue when broken further within regions: – North broken into Northern coastal (from Taree north to Queensland border) and Hunter region – South broken into coastal and highlands and inland valleys Key No. farms Group1 10 Group 2 10 North 20 Group 3 9 Group 4 8 South 17 State 37 State Top 25% 9 Location North coastal from Taree to Qld border North from Gloucester to Upper Hunter 20 farms total South coastal Sydney to Bega Southern inland 17 farms total 37 farms in total Top 25% in the state based on ROA Group1 Group 2 North 2014/15 Dairy Farm Monitor data Break up by region Main Financial Indicators Milk income All other income Gross farm income Variable costs Overhead costs VC + OH costs Total cost of production (Adj for Inventory) EBIT ROA ROE Average Group 3 Group 4 Average Average Average Average Nth coast Hunter Units $/kg MS $/kg MS $/kg MS $/kg MS $/kg MS $/kg MS $/kg MS $/kg MS % % 7.77 1.07 8.85 4.73 3.47 8.20 7.95 0.65 1.3% -0.8% 7.47 0.91 8.38 4.24 3.15 7.39 7.16 0.99 2.6% 1.6% ha ha hd/ha head MS/ha MS/cow % t DM / ha t DM / ha t DM / ha t DM/hd $/ t DM % Milkers/FTE kg MS/FTE $/kg MS $/kg MS 185 86 1.4 230 607 438 61% 6.9 2.0 8.9 2.5 $378 39% 69 30277 $1.92 $3.95 245 105 1.2 289 605 515 57% 5.8 1.7 7.6 3.3 $395 43% 67 34102 $1.90 $3.61 South Average State State Average Top 25% Sth coast Inland 7.63 1.00 8.62 4.49 3.32 7.81 7.57 0.81 1.9% 0.3% 7.60 0.88 8.48 3.82 2.74 6.55 6.24 1.93 3.8% 3.8% 6.92 1.06 7.98 3.76 2.33 6.09 5.95 1.89 7.0% 7.9% 7.30 0.96 8.26 3.79 2.56 6.35 6.12 1.91 5.3% 5.6% 7.46 0.99 8.44 4.16 2.96 7.12 6.88 1.32 3.5 2.8 7.38 1.28 8.66 3.7 2.35 6.05 5.85 2.61 8.1 9.9 214 95 1.3 258 606 475 59% 6.4 1.9 8.3 2.9 386 41% 68 32098 $1.91 $3.79 282 143 1.3 365 641 513 56% 6.4 2.1 8.5 2.8 $417 44% 84 41,774 $1.96 $3.31 473 190 1.0 504 549 571 57% 7.0 1.5 8.4 2.8 $356 43% 89 49,206 $1.38 $3.24 367 164 1.1 427 600 539 57% 6.6 1.8 8.5 2.80 $390 43% 86 45,077 $1.70 $3.28 287 128 1.2 338 602 507 58 6.5 1.8 8.3 2.6 413 42% 77 38200 $1.81 $3.55 443 182 1.3 573 656 508 0.64 9.7 1.6 11.3 2.2 370 36% 101 49520 $1.43 $3.15 Main physical indicators Total usable Area Milking area Milking cows per usable hectares Milking cows Milk solids sold (kg MS/ha) Milk sold (kg MS /cow) Home grown feed as % of ME consumed Grazed pasture Conserved feed Total home grown feed consumed Purchased feed per milker Concentrate price Percent of total energy imported People productivity People productivity Grain & concentrates Total feed costs What’s driving the differences? • Milk price • Cost of production • Profit Why? NOT because of: – Milk price – Farm size – Production per cow – Farm system – % imported feed Why Differences lie in Cost of Production Both in Variable costs (main working expenses of Herd, Shed and Feed costs – Range $3.70 to $4.70 / kg MS And Overhead costs (labour, R&M, depreciation) – Range $2.50 to $3.50 /kg MS That’s $2.00 /kg MS (15 c/l) difference between group 1 and 4 in COP! Conclusions…. It does cost more to produce a kilo of milk solids in the North than the South of the state. – Grain price differential of $30 - $40 per tonne – Lower quality pasture in summer – Smaller farms with lower labour efficiency Opportunity – for all farmers to examine their cost of production and review their management system No one size fits all solution to higher profitability The secret to success Some of the top farms in DFMP 3 farms each from North &South with high EBIT Farm 1 North 10 Farm 2 North 11 Farm 3 North 17 Farm 4 South 21 Farm 5 South 22 Farm 6 South 05 Herd size Usable area 250 361 350 180 880 607 1260 1030 800 443 250 218 Milking area 101 140 226 434 250 100 MS/cow 406 517 624 487 397 555 MS/kg lwt 0.74 1.3 0.67 0.97 0.74 0.87 Pasture cons MA 13.5 10.7 5.9 9.8 9.2 10.2 Cows / FTE 99 68 105 131 163 79 MS / FTE 40344 35407 45082 63665 64667 43717 Milk price 7.89 7.46 7.52 5.90 7.80 7.70 Feed costs 3.07 2.58 3.47 3.47 2.62 3.06 COP 6.22 5.67 6.29 4.71 4.32 6.18 EBIT 3.00 2.58 1.97 2.19 3.74 2.56 Litres/cow Features of top 25% farms (by EBIT) COP $6.00 – 6.50 /KG MS (42-45 c/l) 60 – 65% feed consumed is home grown > 70 cows / FTE, 40,000 kgs MS /FTE Herd size above 250 cows Drive per cow efficiency MS/kg LWT Keep feed costs down by home grown feed and simple diets Are good in most areas of management Dairy Farm Monitor Project Summary 2014/15 was a profitable year for the NSW dairy industry • Average EBIT: $265k, up from $170k • Average NFI: $160K, up from $56k Above average rainfall Higher milk prices High cattle prices Build up of feed inventory Dairy Farm Monitor Project A brief outlook for 2015/16 Milk price: slightly lower than last year Grain prices same or lower – good grain harvest in NSW Seasonal conditions – a cracker so far for most coastal regions – Drier inland, though variable – Some flooding in January in Hunter and south coast Cattle prices strong Milk production in NSW up on last year. Farmer sentiment Percent of Businesses 100% 80% 60% 40% 20% 0% Increase No Change Decrease Increase Milk price No Change Milk production North South Decrease For more information: www.dairyaustralia.com.au/dairyfarmmonitor www.dpi.nsw.gov.au/agriculture/livestock/dairy-cattle • Kerry Kempton, NSW DPI, Tocal • 02 4939 8945 • [email protected]